Part-timers help prop up market

By
Glenda Kwek

STRONG growth in the number of new part-time jobs helped to keep Australia's unemployment rate steady last month, offsetting a recent run of weak reports on the Australian economy.

STRONG growth in the number of new part-time jobs helped to keep Australia's unemployment rate steady last month, offsetting a recent run of weak reports on the Australian economy.

The jobless rate stayed flat at 5.4 per cent in January, beating economists' expectations of a slight rise to 5.5 per cent, the Bureau of Statistics said. The economy lost 9800 full-time jobs but added 20,200 part-time positions, taking the net gain to 10,400.

The participation rate - the percentage of people either in work or looking for work - fell from 65.1 per cent to 65.0 per cent, caused by an ageing population and the exit of discouraged jobseekers. Unemployment in NSW was steady at 5.1 per cent.

Analysts said fiscal tightening, a sluggish economy and the strong dollar meant the unemployment rate was expected to track upwards over the year. Commonwealth Bank economists Gareth Aird and Diana Mousina said the rise in the number of jobs was a ''reasonable result'' and suggested a flexible labour market.

The aggregate monthly hours worked fell to 1621 million hours, which National Australia Bank chief economist Alan Oster said was also a signal that unemployment would continue to deteriorate this year.

''The participation rate, which fell 0.1 per cent for the month, is down almost a full percentage point since November 2010, and that's a pretty significant decline. What that decline means is the unemployment rate based simply on employment growth would be a lot higher,'' Deutsche Bank economist Phil O'Donoghue said.

''That suggests that even though the unemployment rate is unchanged, the trend is pretty clear that unemployment is going to tick up and employment growth is averaging just a little bit above zero over the last couple of months. It's an environment for us where I think the RBA will be continuing in a dovish tone and taking the cash rate lower this year.''

NAB's quarterly business survey found that business conditions were at their weakest since the June quarter of 2009.